Nile Insurance to Flood Capital to 100 Million Birr

The general assembly of Nile Insurance Company S.C., which was held at the Hilton Addis on Saturday, December 26, 2009, ended with an agreement to raise the capital of the company from 43.9 million Br to 100 million Br to buttress the company's financial capacity; the assembly has also agreed to retain all four million Birr earned so far in the 2009/10 fiscal year.

The company needs to raise the extra money because of the construction of its headquarters building which is expected to begin in the fourth quarter of the 2010/11 fiscal year at a plot leased behind the National Theatre, Seyoum Chane, business development manager of the company told Fortune. The feasibility study for the building has already been completed, and Wossen Architects is reviewing the design which it had already done based on the study. Seyoum says that the feasibility study indicated the construction cost to be 120 million Br.

The company is also engaged in the construction of warehouses and garage workshops, according to Seyoum. He adds that the increased capital would also create more room for the company to underwrite large risks and to deal with re-insurers outside Ethiopia.

Nile is yet to tell its shareholders exactly how and when the 100 million Br is to be raised, Seyoum said, adding that the shareholders have agreed to side with the future decisions of the management on the manner of collection. The company has already retained the company's earnings of four million Birr from its current 2009/10 operations to buttress its financial capacity. This, however, does not make up part of the 100 million Br Nile intends to collect, Seyoum said.

The previous year saw an increment in Nile's assets by about seven per cent from about 201 million Br in 2007/08 to about 215 million Br in 2008/09.

The company was established by 93 shareholders in April 1995. It now has 11 branches and 287 employees.